1. An introduction to buying property in the UK

Buying a house is something almost everyone aspires to do. But in 2016, home ownership in England fell to its lowest level in 30 years – highlighting how difficult it can be to get on the property ladder. Saving up a deposit, finding somewhere suitable, and buying the property for a reasonable price are all challenges people face when house hunting.

Buying property is particularly problematic for young people, as the number of 25-to-34-year-olds owning their own home has plunged by a third since 2011. Whatever stage of the property ladder you’re at, buying a house can throw up problems. Most people find themselves part of a chain which relies on a sequence of linked house purchases running smoothly. If any of them fall through, the chain is broken and it causes delays for all involved. It can be stressful and emotional, but there are few feelings that compare to buying your first house. It’s just a matter of educating yourself so you know what to expect, and how best to prepare.

This guide will outline the key stages of buying property, including expert advice for first-time buyers and those looking to move up the property ladder.

A. Property ownership in the UK

In other countries around the world, there isn’t the same ambition to own a home. Places like Denmark, Austria and Germany favour the rental market. On the other hand, in the UK there’s a ‘must own’ mentality. Generally, people don’t want to rent for the long term. As such, they save to get together a deposit and secure the rest of the finance with a mortgage.

On average, house prices have increased by 7% per year since 1980. It’s not hard to see why more people are struggling to buy as price pressures mount. What’s more, a mortgage is most people's biggest single outlay. Buying a house is no easy task. The British dream to own the roof over your head is one which needs careful thought and planning.

There are schemes around to support those looking to buy. All share the same premise: to help people afford their own home. Although they vary in the details, such schemes include:

Shared ownership. A government scheme which offers you the chance to buy a share of a home (between 25% and 75% of the home’s value) and pay rent on the remaining share. Over time, you can buy bigger shares when you can afford to. It’s available to first-time buyers, or households with an income of £80,000 or less (£90,000 or less in London).

Help to Buy ISA. Available from a range of banks and building societies, the Help to Buy ISA boosts your own savings with government support by 25%, up to a maximum of a £3,000 bonus. It’s for people saving to buy their first home.

Right to Buy. Council tenants in England can apply to the Right to Buy scheme for help to buy the home you already rent. Discounts of up to £78,600 (£104,900 in London) are available.

For more information on key government schemes, check out Own Your Home. So far, government-backed schemes have helped 380,000 people become homeowners.

B. Average property prices

Region Annual change % since February 2016 Average price February 2017
East Midlands 7.5 £176,784
East of England 10.3 £281,665
London 3.7 £474,704
North East 2.2 £123,749
North West 6.7 £152,618
South East 5.4 £311,539
South West 6.2 £241,582
West Midlands 7.0 £180,516
Yorkshire and The Humber 5.2 £152,591

Source: GOV.UK

Location is a key factor in house prices. As the table shows, prices vary by region and peak in London. How much you can expect to pay also depends on the type of property you buy. As of February 2017, the average price for a detached house in England was £351,557. At the other end of the scale, a terraced property cost £189,088. Semi-detached properties would set you back £216,151 and flats/maisonettes, on average, £223,540.

Indeed, the cost of buying is often cited as a drawback. When you also consider that you’ll be responsible for paying for any repairs or improvements needed, the thought of owning your own house can be daunting. When you’re renting, you can report any issues to the landlord, who is typically responsible for arranging a fix. It’s not your financial burden.

But there are many benefits to buying. The monthly payments for your mortgage goes towards owning your house outright – not in a landlord’s pocket. You can also live by your own rules – paint the walls whatever colour you want, knock them down or own pets. It’s up to you. Plus, any renovations and changes you make could increase your home's value, resulting in a potential profit. Even if you leave the property untouched, its value could still soar if house prices rise.

When deciding whether to buy or rent, it’s got to be right for you. Key questions to ask yourself before you buy include:

  • Do you have enough for a deposit?
  • Can you afford mortgage repayments and living expenses?
  • How long do you intend to live in your new house? Renting can be cheaper and allows you more flexibility in the short term.
  • Are you buying alone or with a partner or friend?
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